Neutral Citation: 1996 ONICDRG 90
ONTARIO INSURANCE COMMISSION
BETWEEN:
Carmen Palumbo
Applicant
and
Dominion of Canada General Insurance Company
Insurer
DECISION ON PRELIMINARY ISSUE
Issues:
The Applicant, Carmen Palumbo, was injured in a motor vehicle accident on February 13, 1991. He applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 672.1 Weekly income benefits were terminated by the Insurer on October 22, 1993. Mr. Palumbo applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended. I will refer to this as the "1994 application." The 1994 application was heard and a decision was released on April 13, 1995 (the "1995 decision").
Mr. Palumbo appealed the 1995 decision to the Director of Arbitrations. As well, he commenced a second application for arbitration (the "1995 application"). As a result of the decision of the Director's Delegate, Mr. Palumbo indicated that he wished to withdraw the 1995 application. Dominion of Canada General Insurance Company (Dominion) opposed the withdrawal unless it was awarded $2,000 for expenses.
The issues in this hearing are:
- Under what terms, if any, is Mr. Palumbo entitled to withdraw his application for arbitration?
Result:
- Mr. Palumbo is entitled to withdraw his application without terms.
Hearing:
The hearing of the preliminary issue was held in North York, Ontario, on May 27, 1996.
Present at the Hearing:
Applicant: Carmen Palumbo
Applicant's Representative: Altor Shields Barrister and Solicitor
Insurer's Representative: Robert Fenton Barrister and Solicitor
Before: William J. Renahan Arbitrator
Background:
I heard no evidence in this case. The matter proceeded by way of oral submissions.
In the prehearing letter with respect to the 1994 application, the issue was identified as follows:
- Is the Applicant substantially unable to perform his essential tasks from and after October 23, 1993?
At the 1995 hearing the Applicant attempted to adduce evidence with respect to a claim for weekly benefits beyond 156 weeks, that is, beyond February 20, 1994. The Arbitrator ruled that the issue of benefits beyond 156 weeks was not before her and refused to hear evidence on the issue. She also decided that the Applicant was not entitled to weekly benefits beyond October 23, 1993.
The Applicant appealed that decision and commenced the 1995 application for arbitration claiming weekly benefits beyond 156 weeks. On May 24, 1996, the Director's Delegate released a decision upholding the Arbitrator's decision concerning the 1994 application. As a result of the decision by the Director's Delegate, the Applicant sought permission to withdraw his 1995 application for arbitration.
Dominion argued that the 1995 application for arbitration was frivolous, vexatious or an abuse of process and that it should be awarded $2,000 from the Applicant to compensate it for the assessment it paid to respond to the second application for arbitration.
Analysis:
Section 282(11.2) of the Act provides:
(11.2) If an insured person commences an arbitration that, in the opinion of the arbitrator, is frivolous, vexatious or an abuse of process, the arbitrator may award an amount to be paid by the insured person to the insurer that does not exceed the amount assessed against the insurer in respect of the arbitration under section 14. 1993, c.10, s. 33.
Section 66.3 of the Dispute Resolution Practice Code provides:
Where a party does not agree to the withdrawal, the adjudicator may:
(a) permit the applicant to withdraw on such terms as the adjudicator considers appropriate;
(b) where the applicant is the insured person, require the applicant to pay the insurer an amount not more than the amount the insurer is required to pay the Commission to participate in the hearing, if the adjudicator decides that the withdrawal is an abuse of process.
This application was commenced shortly after Mr. Palumbo received the arbitrator's decision that she would not decide the issue of entitlement to weekly benefits after 156 weeks.
Frivolous
Although the Arbitrator found that Mr. Palumbo did not satisfy the test for benefits under section 13(1) of the Schedule, I am not satisfied that the 1995 application was frivolous. At the time Mr. Palumbo commenced the 1995 application for arbitration, there was some chance that the claim for benefits under section 13(8) might succeed. In her decision, the Director's Delegate indicated that the appeal involved more than factual findings and raised important questions relating to the application of the Insurance Act and Schedule.
Vexatious
Nor am I satisfied that this application was vexatious. Mr. Palumbo wished to have his application for benefits under section 13(8) determined at the same time as his application for benefits under section 13(1). The 1995 application was not commenced to vex Dominion.
Abuse of process
I am not satisfied that bringing the 1995 application for arbitration was an abuse of process.
Issues are identified and narrowed at the prehearing through the participation of the applicant and insurer. In the Application for Appointment of Arbitrator in the 1994 application, Mr. Palumbo claims 'insurer refuses to pay benefits ($185.00 per week) after October 22, 1994." In the prehearing letter concerning the 1994 application, the prehearing Arbitrator wrote "Mr. Palumbo claims weekly income benefits from and after October 23, 1993, on an ongoing basis . . ." Weekly income benefits were terminated about 14 weeks before the 156 week mark and the 156 week mark had passed at the time of the prehearing. It appears that Mr. Palumbo intended to claim weekly benefits beyond 156 weeks and that the issue was omitted from the prehearing letter due to oversight.
The issues set out in the prehearing letter are not the applicant's pleadings. They are the issues in dispute which have been framed through the collaborative efforts of the parties and the prehearing arbitrator.
It should have been apparent to both parties that weekly benefits after 156 weeks might have been an issue in the 1994 application. Whether it was an issue could have been addressed by either party at the prehearing. The Applicant is not solely responsible for failing to include that issue in the 1994 arbitration. Although a multiplicity of proceedings is to be avoided, the Applicant's corrective action in commencing a second arbitration cannot be considered an abuse of process in the circumstances of this case.
Accordingly, I find no grounds for making an award under section 282(11.2) of the Act or for setting other terms for the withdrawal of the 1995 application pursuant to section 66.3 of the Dispute Resolution Practice Code.
Order:
- The Applicant is entitled to withdraw his application without terms.
May 31, 1996
William J. Renahan Arbitrator
Date